Gilt Funds with 10 Year Constant Duration as Debt Funds investing a minimum of 80 percent of their assets in government securities issued by the Reserve Bank of India (RBI) with Macaulay Duration of the portfolio equal to 10 years. Macaulay duration is referred to as the average remaining duration of maturity.
Gilt funds with constant duration tend to offer dual benefits of security and returns. Since these investments are exposed to government bonds and securities, there is very little credit risk involved. These funds are considered more prone to interest rate risk and can be chosen as an alternative to investments in bank savings accounts.
The minimum investment varies from scheme to scheme. It could range between Rs.100/ – to Rs.5,000/-.